A crane carries a container (top R) from a ship at the PNC container terminal at the Busan New Port in Busan, about 420 km (261 miles) southeast of Seoul, August 8, 2013.Lee Jae-Won/File Photo

SEOUL (Reuters) - Weak private consumption and tepid employment growth are holding back South Korea's economy even as exports steadily gain, the finance ministry said on Tuesday.

May retail sales declined 0.9 percent from April while the consumer price index gained 1.9 percent year-on-year in June, cooling from 2 percent in July and pointing to a slower-than-expected recovery in domestic demand.

The nation's service sector output also declined 0.3 percent in May on-month after a 0.1 percent rise in April.

The ministry said the economy faces uncertainties from North Korean risks, soaring household debt and a lukewarm job market.